А редакторы могли бы хоть фразы местами переставить.

Оригинал из WSJ

UBS to Report
Big Loss Tied
To Credit Woes
By JASON SINGER, CARRICK MOLLENKAMP and RANDALL SMITH
September 30, 2007 11:44 p.m.; Page A1

Swiss banking giant UBS AG, which recently ousted its chief executive in the wake of losses at an in-house hedge fund and defections of top investment bankers, plans to write down as much as 4 billion Swiss francs, or $3.41 billion, in assets, including securities tied to U.S. subprime mortgages.

The big write-downs will make UBS one of the highest-profile casualties of the recent turmoil in global credit markets and raises questions about the management of its securities business, especially its expansion into the U.S. Another casualty is expected to be Huw Jenkins, chief of the bank's investment-banking division. According to a person familiar with the matter, Marcel Rohner, UBS's new chief executive, is to personally oversee the division, replacing Mr. Jenkins.

After taking a third-quarter write-down of between 3 billion francs and 4 billion francs on its fixed-income assets, UBS expects a loss for the quarter ranging from about 600 million francs to 700 million francs, people familiar with the matter said. For the year-earlier quarter, UBS reported net profit of 2.2 billion Swiss francs. (See related article.)

The write-downs, which UBS is expected to announce today, will be the latest in a series of problems the bank has revealed since the spring when it disclosed the investment bankers' departures and the shuttering of its internal hedge fund after suffering losses on similar risky securities.

UBS, which has expanded from its traditional base in private banking in recent years, appears to be struggling more than other banks, particularly in areas that are newer for it.

The expected write-down at Europe's third-largest bank would be steeper than those posted by the four big investment banks to report results so far -- Goldman Sachs Group Inc., Lehman Brothers Holdings Inc., Morgan Stanley and Bear Stearns Cos. -- all of which were affected in varying degrees by the meltdown in the U.S. market for subprime mortgages, but which nonetheless reported third-quarter profits. Among banks that haven't yet reported, Merrill Lynch & Co. faces a possible third-quarter write-down of as much $4 billion to reflect losses on mortgage-related securities and buyout-financing commitments, a Wall Street analyst predicted last week.

The write-downs represent the first big stamp made by Mr. Rohner, who was named CEO in July after the bank ousted his predecessor in the wake of the shutdown of its internal fund, Dillon Read Capital Management. Mr. Rohner said shortly after taking control of UBS that he would pursue a more conservative strategy, such as limiting expansion of UBS's investment bank. In setting its write-down, UBS is valuing its assets conservatively, people familiar with the matter said. A write-down would also let Mr. Rohner try to sequester problems that started before he took the helm.

The London-based Mr. Jenkins has overseen the division for the past two years, a period in which it grew aggressively, and also took on risks linked to the U.S. subprime-mortgage market at a time when those assets were already beginning to founder. As the damage from the division's trading strategy began to unfold, Mr. Jenkins in early August replaced the bank's fixed-income chief, but its troubles mounted in the months that followed.

A UBS spokesman in Zurich, where the bank is based, declined to comment.

UBS has done some other reshuffling in its investment- banking leadership recently, naming two new co-heads for Europe, the Middle East and Africa.

Like many banks and funds, UBS drastically cut the value it attached to its asset-backed bonds after buyers for those securities disappeared over the summer and failed to return this fall. The move provided yet another sign of the widespread damage done by the U.S subprime-mortgage collapse. UBS's write-down will be closely watched. It signals that the bank is taking a dim view of the trading value of these securities in the near term.

While banks globally have struggled with fallout from the credit crunch and investors have beaten down many of their stocks, stock markets overall have been resilient. So far this year, the Dow Jones Industrial Average is up 11%, the Nasdaq Composite Index is up 12%, and the pan-European Dow Jones Stoxx 600 index is up 3.4%. On Friday, UBS shares, which have fallen roughly 16% this year, rose 0.72% to 62.60 francs.

The next few weeks, though, could test that resilience as a number of banks mark down the value of the assets on their books, giving investors a more complete picture of the extent of the credit crisis. UBS is expected to disclose its problems in fixed income today ahead of its third-quarter results, which are due Oct. 30. Should other financial institutions also issue warnings, the equanimity of the equity markets may not last.

UBS, along with Credit Suisse Group and Deutsche Bank AG, has been prominent among the European banks that have sought to challenge Wall Street's largest securities firms and banks in the U.S. market with mixed success and a series of blow-ups. UBS's biggest bet in the U.S. was to pay $10 billion for the retail brokerage firm PaineWebber Group Inc. at the top of the market in 2000. But it has been more cautious in trying to build up an investment bank, hiring a few stars like Ken Moelis from Credit Suisse and bulking up in selected areas such as health care and media. Recently, some of those stars like Mr. Moelis and consumer-goods specialist Blair Effron have resigned.

In recent years, UBS's investment bank has become a formidable force on Wall Street and a top trading firm. It has also made inroads in some lucrative market sectors such as stock underwriting, helped by its presence in fast-growing overseas markets. While UBS ranked only No. 10 in overall global underwriting of stocks and bonds for the first nine months of this year, according to Thomson Financial, which tracks new issues, it ranked No. 1 in the most lucrative category, global initial public offerings, and No. 5 in fees collected.

However, UBS's fixed-income division suffered after the bank set up Dillon Read, the in-house hedge fund it started in June 2005, because the unit siphoned off many of the bond team's best traders.

Losses from Dillon Read widened to 230 million Swiss francs in the second quarter from 150 million Swiss francs in the first quarter, UBS said. Shutting it down cost the bank $314 million in the second quarter to cover restructuring, severance payouts and write-downs of unused rental space for the traders.

The latest losses are, in part, a result of continued costs of writing off Dillon Read's soured mortgage bets, but they are also a result of other securities held by the fixed-income division.

The subprime losses rippled through other parts of the markets and led to investors holding back on trading credit. Prices became uncertain due to the limited trading. Now, after months of scarce liquidity, some big banks and brokerages are starting to mark down the securities they hold, a trend the markets will be watching closely to see how much of an impact was caused by the summer's credit crunch.

By comparison, among major U.S. securities firms which reported results for their third quarters ended in August, Morgan Stanley reported markdowns of $940 million for leveraged loans and another $1 billion fixed-income revenue decline reflecting other markdowns in mortgages and other trading position. Lehman and Bear both said they took $700 million debt markdowns, in Lehman's case after counting hedges and profits on some debt it owes.

UBS has had rocky periods before. The bank said a bad bet on interest rates and weaker trading income helped lower net profit in last year's third quarter by 21% from 2.77 billion francs a year earlier..